FSAVC query

Ethelred865

Please can you help with a query on FSAVC ?
I am 54 years old, I plan to retire at 55 – live off savings for 5 years & then take my final salary pension at 60 (pension pot is approx £350,000).

I have a FSAVC – which matures at 55 – it has a plan value of £37,000 – I do not need to use this to generate an income, so ideally I would like to cash it in.

Am I right in thinking that I can cash the whole amount in - taking 25% tax free & then the remaining 75% is taxed ?

Is there a way that I can take an amount each year – without paying tax ?- bearing in mind between the years from 55 to 60 – I will be living off savings & therefore I assume I will not be paying Income tax – so will have my tax free personal allowance.

xylophone

You might consider moving the FSAVC to a pension arrangement which would allow drawdown.

Some information here as an example http://www.hl.co.uk/pensions/drawdown/how-does-it-work

The personal allowance for 2017-18 will rise to £11,500 - you may also be able to take advantage of the 0% band on savings interest and the personal savings allowance.

http://www.taxvol.org.uk/about-tax/entitled-10-band-savings-interest/

robin61

You might want to check on whether there is a guaranteed annuity rate on the FSAVC before you decide whether to transfer of not. If there is one I think that as it is over £30k you will probably need to get financial advice first.

dunstonh

Am I right in thinking that I can cash the whole amount in - taking 25% tax free & then the remaining 75% is taxed ?

yes.

FSAVCs were reclassified as personal pensions in 2006. So, any rules that apply to personal pensions will apply to old FSAVCs.

Is there a way that I can take an amount each year – without paying tax ?

yes.